Eli Lilly and Company, headquartered in Indianapolis, and AC Immune SA, based in Lausanne, Switzerland, entereda license and collaboration deal to research and develop tau aggregation inhibitor compounds for the treatment of Alzheimer’s and other neurodegenerative diseases.

Under the terms of the deal, Lilly will pay AC Immune about $80.5 million (US) upfront in addition to $50 million for a note that is convertible to equity at a premium. AC Immune is also eligible for about $60 million in near-term development milestone payments as well as various other milestone payments that could reach over $1.7 billion. AC Immune is also eligible for tiered, low, double-digit royalties.

The companies will combine AC Immune’s proprietary Morphomer tech platform with Lilly’s expertise in clinical development and commercialization in central nervous system disorders. AC Immune has identified a series of small molecules dubbed Morphomers that selectively and potently reduce the abnormal tau proteins associated with late-stage Alzheimer’s and other neurological disorders.

Typically, in Alzheimer’s disease, beta-amyloid proteins cluster and accumulate earlier in the disease. Clumps of tau proteins accumulate in the brains of Alzheimer’s patients later in the disease. In some studies, cutting tau is also linked to a decrease in neuroinflammation, another pathologic aspect of Alzheimer’s disease.

The collaboration will mostly focus on AC Immune’s lead molecule, AC-3024, which inhibits tau accumulation in preclinical models. AC Immune will launch the first Phase I program for the Morphomer tau aggregation inhibitors, and Lilly will fund and conduct later clinical development. Lilly will hold worldwide commercialization rights for any inhibitors that come out of the collaboration in the area of Alzheimer’s disease. AC Immune holds specific development rights in orphan indications as well as co-development and co-promotion options for certain indications outside of Alzheimer’s.

“Lilly is an industry leader in Alzheimer’s research, with numerous ongoing scientific programs that target suspected causes of the disease, including amyloid plaques and tau tangles,” stated Mark Mintun, vice president of neurodegeneration and pain research at Lilly. “This agreement with AC Immune represents another opportunity to hopefully make progress against this devastating disease, and we look forward to together bringing tau aggregation inhibitors into clinical development.”

AC Immune already has similar partnerships with Johnson & Johnson and Roche. J&J and AC Immune signed a $509 million deal in 2015 for a Tau-targeting vaccine, ACI-35, for Alzheimer’s disease. The idea is that the vaccine will treatwhat is dubbed tauopathy in Alzheimer’s by causing an immune response to certain types of phosphorylated tau proteins without stimulating autoimmune B cell or T cell activity against other types of tau intracellular proteins. The Phase Ib clinical trial was apparently concluded in June 2017, although results do not appear to have been released.

AC Immune and Roche’s partnership has been ongoing. In July 2018, the two companies announced that the second Phase III clinical trial of AC Immune’s anti-Abeta antibody candidate for Alzheimer’s, crenezumab, had completed global recruitment. The two companies have several programs ongoing for both beta-amyloid and tau.